Mortgage Forum

Joel Fraser

We are in California and got a option arm loan from Downey Savings through a mortgage broker.We were selling a house and buying one at the same time.It was a loan that we stated our income to qualify,and started at 1400$ a month and is now 2800$ interest only.I have been looking over the documents that we signed for the loan and can't believe the numbers that are on there.In our enthusiasm to obtain a house we missed that the broker mis-stated our income.He promised to do the refinance at no charge,but with the pre payment penalty and by the time it had expired we were unable to think about refinancing.For example my wifes business at the time made $4000 a year and he put it down as a month.Downey didnt need to have CPA numbers on her,only a list of 3 people she had sold to.He changed my job title on the application because evidently it was not in line with the number he needed to qualify us for the loan.We are going under with this house and are considering walking away.I have contacted Downey and all they will consider is a short sale.I have fico of 720 and can put 20% down on a house with the money I have left instead of using it to help make the payment.I would do that before my credit went into a tailspin.The mortgage is the one we got when we bought the house and there are no seconds.We paid 546,000 and the same house 2 doors down sold for 285000 last week.We owe about 438000 and are incurring neg am because we are paying the min every month.I dont know if I should do a short sale,or just walk away.I dont want the house to be vandalized by abandoning it,but I cant think that Downey would accept the keys in the mail,would that not be a de facto DIL? I am not wanting to jeopardize my looking for a house in anyway by alerting Downey or anyone else before we secure a place to live.A lot of good information here and thanks to anyone who might have any suggestions for me.